How to start a candle business: wicks, wax, and business tax

Starting a candle business can be a fun and rewarding way to earn extra income. Depending on your needs and skills, the revenue generated from your venture may even replace your income from your day job within a year. And if you’re ambitious enough, you can grow your business to be an absolute powerhouse.

But starting a candle business involves more than putting together some wax, wicks, and jars and slapping them up on an Etsy page. If you want this to be more than a hobby, you’ll need to put some real thought into it. Fortunately, you found this article to help shine a light on your venture.

1. Blending the wax: planning your candle business

Abraham Lincoln once said, “If I had eight hours to chop down a tree, I’d spend six sharpening my ax”. So either he was a great procrastinator or knew a thing or two about planning.

The idea is that preparation is probably the most important part of any venture. Follow honest Abe’s advice and start with a lot of planning. Try brainstorming, taking notes, and meeting with any advisors and mentors.

Brainstorm

The first step in your journey is to develop a great idea for your candle business. Remember, there are no bad ideas when brainstorming. The one you think is the weakest may turn out to be gold. Once you’ve settled on what you think is the best business idea, it’s time to start fleshing it out.

Start expanding your selected idea by jotting down a few concepts. Mind maps are great tools for getting information down on paper in a structured way. You can do this the old-fashioned way, with pen and paper, or use a free and easy mind map tool like FreeMind. Tools like this help with structuring your concept as they have a great selection of keyboard shortcuts to help you quickly add and rearrange ideas.

Make sure to get as detailed as possible. What kind of candles do you want to sell? What’s your target market? How will you promote your business? Get it all out of your head, no matter what comes to mind.

Professional business plan

Now that you have a line of candles in mind, it’s time to create a business plan. In a business plan, you’ll begin to polish your concept so that it’s suitable for advisors, investors, and other individuals who may assist you in making your vision a reality.

A business plan is a kind of road map for your company. It will show you what your company should look like and how it should function.

There are various sources that can assist you in developing a business plan. The Small Business Administration (SBA) has a great guide on writing a business plan that will teach you everything you need to know.

Advice and mentorship

After you finish your business plan, you should start consulting with advisors. These are individuals who can help you bring your idea to life.

The SBA can connect you with local experts who can assist you with all aspects of your company. They’re usually retirees with a lot of business experience and enough spare time to help others. Even better, the SBA advisors work as volunteers, so the service won’t cost you a dime.

2. Presenting scents: making yourself visible online

Before you go any further, you should consider your company name. You might want to go with the first thing that comes to mind or something clever you’ve had in mind for a while. But it’s essential to do some research first.

People will see your business name on your business cards, website, social media, marketing resources, and more. That’s why it’s critical to pick a name that’s not only available but one you’re proud of and accurately represents your business.

Domain names

Every modern business needs a website. However, finding a domain name for your candle business can be challenging. To make sure your domain name matches your business name, it’s best to choose your website first. Here are some helpful hints to keep in mind while searching:

• Keep it simple: The shorter your domain name, the more likely consumers will remember it and type it correctly.
• Avoid using numbers and hyphens: While numbers and hyphens make your domain name unique, they can confuse your customers.
• Make it simple to say and spell: Not everyone who comes to your site will be coming from a link. You want your clients to be able to tell their friends about your website. However, if your domain name is tricky to say or spell, that might be difficult.
• Don’t use slang or jargon: While you may know the most up-to-date industry lingo, your consumers probably won’t. Stick to simple words that everybody knows.
• Select an easy extension: There are many new domain extensions, like .lighting, .soy, and .shop, for example. A dot com is still the best, but you aren’t stuck with it. And although the new extensions make it easier to get a perfect domain, “.com” is locked into most people’s brains. So you may be able to snag wixwax.lighting, but people will often still type wixwax.lighting.com or wixwax.com.
• Consider alternative domain names: And if at first you don’t succeed, try, try again. A good dot com is tough to find, so think outside the box and be patient.
• Make sure it makes sense for your business: Your domain name should give visitors a clear idea of what to expect from your website. For example, if you sell candles in Altoids tins, you might want to go withwww.mintycandles.com instead of www.freshenup.com.

Social media

While we’ll be looking at social media and how it’s leveraged for marketing in the following sections, it’s important to create your domains on the various channels early on.

You may have more flexibility in picking your social media names, but they should still be easy to remember and align with your brand.

3. Improving burn time: securing funds

One of the most difficult challenges you’ll face when starting your business is financing. But with the proper planning and preparation, you’ll make it through.

Investor selection

Before you start shopping around for investors, keep the following points in mind:

• Know your numbers: It’s critical to have a firm grasp of your financial position before applying for funding. In addition, you should already have a well-thought-out business plan that details your anticipated costs, revenue sources, and profit margins. Knowing your numbers well will improve your chances of getting funded.
• Have realistic goals: When applying for financial aid, it’s crucial to have reasonable expectations. Keep in mind that investors are taking a risk by investing in your vision, so don’t ask for more cash than you need. Have a clear description of how you plan to use the money and what you expect to accomplish with it.
• Get ready to answer difficult questions: Be confident about why you’re asking for the money and what steps you’ve taken to succeed. Anticipating these questions will help you prove to investors that you’re serious about your candle business.
• Have a plan B: No matter how well you prepare, there’s always a chance that you won’t get the financing you need, so it’s essential to have more than one financing plan.
• Be patient: It takes time to find the right investors and get them on board. Don’t give up if you don’t get funded immediately.

Finance sources

While it’s true that 90% of businesses might fail within the first year, don’t ever give up on your dreams of running your own business. But don’t bankrupt yourself following them either. The internet makes side hustles easier and more profitable than ever. You can get really far on a shoestring, but that string may wear thin and snap along the way.

Here are some suggestions on funding sources to get you started. Don’t jump in feet first though, talk to an accountant, an SBA advisor, or your financial planner before using any of these options to see which suits you and your situation best:

• Crowdfunding: This is a way of raising money by asking for small amounts from a large group of people, usually through an online platform. It’s a great option if you have a solid business plan and a large social media following. You can use crowdfunding to pre-sell products, raise awareness for your brand, or even finance your entire operation. Offering limited edition candles and products to the first few purchasers can raise interest.
• Bootstrapping: Chances are, if you’re planning on starting a candle business, you’ve already invested a lot of time and effort into making candles. You’ve likely experimented with waxes and other materials, bought some special equipment, and watched a ton of YouTube videos. If that’s the case, you can start with an Etsy shop this weekend and grow from there. No additional funding may be required.
• Personal savings and credit cards: If you need an upfront investment, why not use your own money? Self-funding is an excellent option, but only if you can do it safely. Speak to a professional financial advisor before going this route.
• Friends and family: If you’re lucky enough to have supportive parents, a small loan from them could go a long way. Be aware that borrowing cash from friends and family can be tricky if you can’t pay them back.
• Government grants: If you’re starting a business that will positively impact your community, grant programs are often available to help you get started. Research and see if these programs could be a good fit for your business. All the information and program lists are available for free from official government and nonprofit websites. If sites start asking for payment, you may have gone down the wrong path.
• Angel investors: Angel investing is mainly used for internet startups as these investors don’t usually fund smaller craft-based businesses. But who knows what you may find on your search. You can find angel investors by attending business events and searching the web.

4. Hardening the wax: understanding legalities

You will have different legal considerations in each phase of your business. Here are a few things to keep in mind as you grow:

• Incorporation: Choose a business structure and register your business name early in your venture. This will help you protect your personal assets and avoid liability.
• Federal and state tax IDs: Your business needs a federal employer identification number (EIN). This will allow you to open a bank account, file taxes, and apply for licenses and permits. Depending on your state, you might also need a state tax ID.
• Licenses and permits: You might be able to find this information online, but it can be a tangled bureaucratic mess. You need to make sure you do everything right the first time to avoid getting in trouble down the road, so it’s best to pick up a phone and make a few calls. Laws can differ from city to city, state to state, and county to county. Each governmental body can have its own retail and online sales laws.
• Copyrights: It could be challenging to copyright a fragrance or even a candle presentation. But your logo, written works, and business art should all be copyrighted.
• Trademarks: Your brand name and logo should also be trademarked. Doing so will prevent others from using your assets and allow you to take legal action if they do.
• Patents (if relevant): Chances are, you aren’t going to invent a brand-new kind of candle. Most products are just reimaginings of existing goods or are too similar to justify patenting. But if you create something truly innovative, you should patent it.
• Taxes: In the business world, just like in the personal world, you must pay taxes. You should speak to an accountant or tax specialist to ensure you are paying the correct amount of tax.
• Insurance: If you have a physical storefront, it’s vital to insure it. Insurance can cover damage to your property, theft, and various liabilities. Consider insurance for shipping as well if you’re planning to sell your products online.
• Contracts: You need to use contracts whenever you do business with anyone. Ever notice how they have Terms and Conditions every time you sign up for an online service? That’s about the same as a business contract, just more generalized. But the point is, everybody does it, and you should too.
• Employment law: If you have employees, many laws come into play. You’ll need to comply with laws like the National Labor Relations Act, the Family Medical Leave Act, and the Americans with Disabilities Act, to name a few. It’s a good idea to hire someone to help you with the process before you start. Outsourcing to specialists is fine too.

Keeping on top of legal matters is vital to the success of any business. Although overwhelming, it doesn’t have to be a nightmare. With a bit of research, you can make sure your candle business is legal and compliant with all the necessary laws. But you should also speak to a lawyer or consultant to make sure you’re covered.

5. Setting up an appealing display: marketing to your audience

It was easy to market a startup 30 years ago. All you needed was a great location and an ad in the newspaper or white pages. You could even get a radio or TV spot if you had the moolah.

Nowadays, simple ads aren’t enough. Instead, you must build a community and a following through social media, websites, and more.

While learning the fundamentals of marketing can be a huge undertaking, we’ll provide a short crash course on some of the most important factors when marketing your candle business.

Build a community

To compete with other players in the candle-making game, you’ll need to build a community of followers who support the brand because of what makes it special. You’ll need to put in a bit of research to find your people online who will become brand ambassadors.

Social media is probably the best way to build a community for a candle business. Pick the outlets you already use—and therefore know best—to start creating a following.

Think like a marketer

Marketing is a skill that can be worked at, learned, and strengthened over time. A great place to learn just about everything about marketing is Udemy. Udemy offers hundreds of excellent courses for a monthly fee. Or you can purchase a single course for around 20 bucks.

Anyone can make a few tweets, but thinking like a marketer is a whole other challenge. According to comic favorite Dilbert, it’s justliquor and guessing. But in truth, there’s a lot more to it. Three of the most important aspects of marketing are

1. Understanding strategy vs tactics: A tactic is a single action you take to achieve a goal. A strategy is the overall game plan. Strategy is the forest, and the tactics are the trees. For example, tweeting regularly is a tactic. Creating a social media presence, selling at local farmer’s markets, and hanging out at trade shows are parts of a strategy.
2. Becoming a leader among your people: You’re not going to become a household name overnight. You can’t compete with Bath and Body Works or Yankee Candle. Not yet, anyway. First, you’ll have to find a tight niche. Those are your people. Become a legend in your community of followers before competing in the big leagues.
3. Getting out on the long tail: If you’re not already familiar with this, check out a power-law graph of popularity. When looking at the graph, you can see a high peak to the left where the most popular products sit. Then there’s a “long tail” to the right. That’s where all the brands like yours hang out. If you were to advertise on social media using keywords like “scented candles,” you’d be on the left of the graph, competing with brands like Yankee Candle, Loewe, and Amazon. But if you try advertising with a keyword like “eco-friendly soy candles with natural scents,” you’re more likely to come up on the first page of a Google search every time.

You can learn most of these concepts from marketing guru Seth Godin. He’s written 20 bestsellers and has an excellent daily blog with great free advice. His best book on the topic is titled This Is Marketing. Even if you choose to hire professional marketers, you should still read it to get an understanding of the marketer’s mindset. It’ll help you understand this most important part of your business.

6. Choosing wicks and wax: manufacturing and materials

We now turn to an essential part of your candle-making journey, the actual product. Let’s look at how to acquire materials and create enough candles to meet demand.

Creating a framework

In the beginning, you’ll probably be doing everything by yourself and by hand. This is a time for research, experimentation, and learning. Try out different wicks, waxes, scents, containers, decor, etc. See what works best. Create a spreadsheet to track all your learnings. Take notes on each batch. And don’t forget to get feedback from your customers, investors, family members, and friends.

You’ll also want to start thinking about packaging. Again, this is another excellent time to get creative. Look for unique ways to stand out from the competition, but also make sure your packaging is practical and will protect your candles during shipping.

Also, think about long-term costs as you scale. Suppliers that serve you at the hobbyist level might not be able to give you the best price breaks once you’re placing orders for 10,000 pounds of wax at a time.

You should also look for ways to automate and streamline your process as much as possible. This will help save time and money as you grow. Take whatever you’re doing, then think about how you can do it more efficiently. Once you get the process down and start hiring, you can teach your process to others.

Hiring and outsourcing

Once everything is worked out and you need more hands to craft your waxy goods, you can go one of two routes. You can rent a facility and hire workers or outsource to manufacturers that can produce at a larger scale.

If you hire in-house, that’s where the processes you created will serve you best. But if you go with manufacturers, here are some things to keep in mind:

• Reliability: Can they meet your deadlines? Do they have a good reputation? Can they handle changes on short notice? They’re not just a part of your business but a business partner.
• Communication skills: You will be doing a lot of communication with your manufacturer. If they’re working overseas, communication could be an issue. Make sure they’re responsive, have good English skills, work your hours, and respond well to feedback.
• Turnaround time: It’s important that your manufacturers can meet your deadlines. But it’s just as vital that they can make changes quickly if something goes wrong.
• Quality control: They should have a sound system in place to catch errors, and they must stand behind their products. You should be able to trust that they’ll consistently deliver the highest quality. If they don’t, make sure they have a process to make it right.
• Competitive pricing: Find out if you’re getting the best price—but also make sure they’re not cutting corners to do it.
• Production scaling: Your manufacturer should be able to adjust to your changing needs. If you’re selling more candles than expected, they should be able to increase production. But if sales slow down, they should be able to decrease production without penalties.
• Product flexibility: Let’s say that most of your candles are simple scents in tins. If you decide to add a collection of clear gel candles with decorations in the gel, they should also be able to manage that—in small or large batches, as needed.

Your business needs to stand out from everyone else’s. Your manufacturer must help you reach that goal. So research, find references, and don’t be afraid to ask questions.

7. Using freshly poured wax: getting the right software

One of the best things about starting a business today is that you have the internet and various software programs at your disposal, which makes building your business easier than ever. Communication is quicker, tedious processes are automated, and business practices don’t require nearly as much specialized knowledge.

Here are some of the best tools for a startup like yours:

• Jotform is the premier communication automation tool. Its versatility means you’ll constantly find places in your business processes where Jotform is the perfect match for your needs.
• Google Docs, Gmail, and Meet are Google’s cloud-based tools that allow you and your team to communicate and work together in real-time. When your business grows, look to Workspace, a Google product designed for companies of every size, from tiny mom-and-pops to massive enterprises.
• ClickUp is probably the most versatile productivity tool currently available. If all you need is a few checklists, ClickUp makes drawing up these lists simple. If you want a vast collection of custom tools designed to manage every aspect of your business, it’s good at that too. The one drawback is that it’s a lot to learn if you’re not tech-savvy. But it’s worth the time investment.

Those are some of the best tools in the business. Now let’s figure out how to work them into your venture.

8. Establishing multiple layers: leveraging business systems

If it’s just you and your best friend working together, you probably have yet to start thinking about the complexities of running a business. But that’s ok, you have to start somewhere.

You can start by just doing the work, streamlining, and building up systems, just like with your manufacturing process.

In the beginning, you’re going to find yourself wearing many hats. Take time to think about each one. Think about what you’re doing and how you can streamline it. As mentioned, you should try to create a system that can be repeated and taught.

The E-Myth Revisited by Michael Gerber is an outstanding book that teaches you how to work on your business, not just in your business. Another book, The 4-Hour Workweek by Tim Ferris, is also excellent. It teaches you how to automate and outsource several aspects of your business.

Here are some common processes and some tricks for managing your business processes:

• Accounting: Accounting includes bookkeeping, payroll, and taxes. QuickBooks is the most popular choice for early-stage businesses and the self-employed. Another popular and free option is Wave from H&R Block.
• Human resources: This department handles hiring, firing, managing benefits, and more. Most of your HR can be done with Jotform. You can use it to receive resumes, fill out legal documents, manage employee lists and their information, and much more.
• Customer service: Never forget your customers. They’re the most vital part of your business. Once again, Jotform is your friend. You can create forms to collect service requests, return requests, product feedback, and more.
• Research and development: As mentioned in the manufacturing section, you’ll need to do a lot of R&D upfront. But it doesn’t end there. The process needs to continue through the life of your business to keep things fresh and exciting. Google Sheets can help track your efforts, and Google Docs gives you a great way to take notes. Google Workspace is also fantastic for collaboration.
• Marketing: Jotform has many marketing templates that can collect email addresses, market research, and much more. If you like Google Docs, that platform can help you manage all your campaigns. Buffer is a fantastic tool that automates social media posting and Mailchimp will help you create highly professional email campaigns that don’t get flagged as spam.
• Quality assurance: The quality of the product that you deliver should be a top priority. It says a lot about your business. You can create forms for the inspection process with Jotform. In addition, Jotform Workflows can automate your policies and procedures for decision-making.
• Shipping and receiving: You don’t need a huge warehouse to store all your products these days because of the many available fulfillment services. Third parties will store your product, pack it, and ship it. They’ll also handle returns and a certain amount of customer service. Amazon is one of the most popular and reliable fulfillment providers.
• Manufacturing: You’ll need a lot of records and documents to manage your manufacturing. Google Docs should provide everything you need.
• Web presence and storefront: This can be overwhelming for people with a non-technical background. Fortunately, many tools make the process easy enough for anyone. Jotform Store Builder is one of the best tools out there. It will help you get a shop up and running in minutes with more than 100 templates to choose from. You can use it to list products, accept payments, track orders, and more.

9. Lighting the wick: starting your journey

We’ve only dipped into the surface of what it takes to start a candle business. But really, the important thing is just to start! Just roll up your sleeves and get to work. You can always iterate as you go and get rid of anything that doesn’t work. Just open a blank document and start writing your plan!

As discussed early on, there is much planning to do up front, but that’s mainly to get the ideas out of your head and onto paper—or a computer screen. Once you’ve done that, just get back to work. Bookmark this page so you can revert to it as you progress.

Whatever success looks like for you, here’s hoping you will see it, well lit by a thousand candles. And here’s to you for taking the first steps to owning your own business!

Photo by RDNE Stock project